Mortgage stress slams one million households
FOR the first time, more than 1 million Australian families are classed as “mortgage stressed”, with many slashing their spending and downsizing to one car to make ends meet.
Others have ditched their car altogether and hire a neighbour’s vehicle by the hour to pick up their children from school or do their weekly grocery shopping.
Struggling families are also cancelling pay TV, choosing free public schools, and eating out less, researchers have revealed.
Across Australia 1,003,000 households are estimated to be in mortgage stress – almost one-third of owner-occupied borrowers – Digital Finance Analytics has found.
DFA principal Martin North said underemployment and rises in living costs – notably childcare, school fees and fuel – while real incomes continue to fall are causing significant pain.
“Many are dipping into savings to support their finances,” Mr North said.
Households are defined as “stressed” when net income does not cover ongoing costs.
DFA, which surveys about 4500 households in its monthly polls, estimates that more than 61,000 families are at risk of a 30-day default on their mortgage in the next 12 months.